Using capital budgeting, managers seek to answer which of the following questions?
A)What is the expected future cost?
B)Does the anticipated future profit cover the cost incurred in the current period?
C)What is the expected future profit?
D)Does the anticipated future cost exceed the profit enjoyed in the current period?

Question

Quizplus · Accepted Answer

Capital budgeting helps managers evaluate whether the future profit generated by an investment project will cover the cost incurred in the current period. It involves forecasting expected cash flows, calculating net present value, and analyzing other financial metrics to assess the feasibility and profitability of investment opportunities. Answer A is related to cost forecasting, but it does not address the profitability of the investment. Answer C is also important, but it is not the primary focus of capital budgeting, which is to assess whether the investment generates sufficient returns to justify the cost. Answer D is the opposite of what managers want to see in a successful investment project.

Using Capital Budgeting, Managers Seek to Answer Which of the Following